Diesel Hits $6.52 a Gallon as US Weighs Export Ban
US diesel prices rose 73% to $6.52 a gallon, prompting Republican calls to ban exports amid the Middle East war.
Key points
- US diesel prices rose 73% to 6.52 dollars a gallon following the start of the war with Iran.
- Republicans in Iowa and Michigan are urging the US to ban diesel exports to lower domestic costs.
- The closure of the Strait of Hormuz removed 20% of global oil supply, driving the price spike.
Diesel fuel prices in the United States reached 6.52 dollars per gallon on Wednesday. This represents a 73 percent increase from the 3.77 dollars paid before the war with Iran began. The surge is driven by the conflict in the Middle East.
Republicans in key states like Iowa and Michigan are calling for an end to diesel exports. They argue that keeping fuel domestic will lower prices for American consumers. President Trump indicated support for this measure, though details remain unclear.
Political pressure mounts over fuel costs
Democratic candidates are using high diesel prices to attack Republican policies. They argue that the war is causing an expanding economic crisis. This strategy aims to fuel anger over runaway costs ahead of the midterms.
Republican Sen. Chuck Grassley of Iowa became the strongest champion of an export ban. He argued that if the US can embargo chips, it can embargo diesel. Senate Majority Leader John Thune said he is open to considering the proposal.
Administration weighs options for relief
Energy Secretary Chris Wright stated that a blanket ban on exports is not being discussed. Treasury Secretary Scott Bessent said the administration is still exploring ways to lower prices. This suggests a full stop to trade is unlikely at this stage.
The US used 4.1 million barrels of diesel per day this year. It exported 1.5 million barrels per day during the same period, according to S&P Global Energy. These figures show the significant volume of fuel moving across borders.
Supply constraints drive price spikes
The Middle East produces a disproportionate share of the oil used for diesel. The closure of the Strait of Hormuz took about 20% of world oil off the market. This supply shock caused diesel prices to rise faster than gasoline prices.
Joseph Brusuelas, chief economist for RSM, noted that diesel touches everything in the economy. He said this includes groceries, the product Americans buy most. The pain of high fuel costs is spreading to every consumer sector.
